AUTHORISED DEALER
A commercial bank, trust company, any institution or individual licensed by the Exchange Control Authority to buy and sell foreign currency and gold bullion under specified conditions.
N.B. A person or company, who is not an AUTHORISED DEALER, may accept a foreign currency in exchange for goods and services in Barbados, but he may not dispose of such foreign currency except through an AUTHORISED DEALER.
A BOND
A certificate issued by a Government, statutory authority, or company as a promise to repay money borrowed over a long period of time. Interest is paid at a fixed rate annually, semi annually, or quarterly and the face value repaid at the end of the period of the loan. BONDS are easily transferable from one owner to another.
BULLION
Gold and silver, in bars or in mass.
CENTRAL BANK
An institution established by Government to issue currency, manage the nation’s foreign exchange reserves, regulate the commercial banking system, maintain orderly credit conditions, act as banker to the Government and advise Government on monetary and economic affairs.
COMMERCIAL BANK
An institution which accepts deposits from the public and makes loans to Business, Government and individuals. By honouring cheques drawn upon demand deposits, the commercial banking system is a creator of the most important component of the money supply in Barbados and in countries with a reasonably well developed financial system. COMMERCIAL BANKS in Barbados act as both Authorised Dealers and Authorised Depositaries.
CURRENCY
Notes and coins accepted as payment in settlement of transactions and debts.
DEBENTURES
A certificate of indebtedness given by borrower and usually secured by a charge on the property of the borrower, i.e. if the borrower fails to repay the debt under the terms of the DEBENTURE, the holder of the DEBENTURE may take legal steps to acquire the property pledged under the DEBENTURE.
Government DEBENTURES are normally secured by a charge on the revenue of the Government and repayment always assured.
EXPORT
Sale abroad of a country’s goods and services. EXPORTS may be either “visible” or “invisible’ ; e.g. sugar “visible” export of Barbados but when taximan sells a ride from the airport to Bridgetown to a visitor, he is making an “invisible” EXPORT to the country of the visitor’s origin.
FOREIGN BORROWING
A loan from a foreign creditor to an individual or company resident in Barbados.
IMPORTS
All goods and services purchased from abroad. IMPORTS may be either “visible” or “invisible”, e.g. a motor-car is a “visible” IMPORT, but if a Barbadian visits New York and pays for a taxi ride from the airport to downtown, Manhattan, he is making an “invisible” IMPORT into Barbados.
INSURANCE
The means by which risks are shared among a large number of people or institutions which are exposed to them. In the event of a misfortune befalling an individual or institution so insured, compensation is paid out of the premium provided by all those who are insured against that misfortune.
INVESTMENT
The expenditure of funds by a person, institution or Government in the expectation that benefits will accrue from the same expenditure sometime in the future.
LEGACY
Personal property, including sum of money, bequeathed by will to a beneficiary.
NUMISMATIC
Referring to the collection of coins as a hobby.
REMITTANCE
A sum of money sent from one place to another.
REPATRIATION
In a financial sense, the remittance of the original source of funds and, where the original funds were for investment purposes, the remittance of profits, interest payments of dividends therefrom.
SHARE
A certificate indicating that the holder participates in the ownership of a company and has a claim to a part of its profits. The type of SHARE – whether ordinary preference – and the number of SHARES held, indicate the rights of the holder and the extent of his ownership.
STOCK
In a financial sense, a type of security or method of holding ownership in a company. Unlike shares, which cannot be divided and transferred in fractions, STOCK may be transferred in any amount, subject sometimes to certain limitations. STOCKS are issued mostly by public or semi-public utilities.
TRAVEL ALLOWANCES
The amount of foreign currency permitted by Exchange Control to those wishing to travel outside of Barbados.
UNIT TRUST
An organisation which raises money, mostly from small investors, for the purchase of securities for investment purposes. A small investor is allowed to purchase “units” in the UNIT TRUST’S portfolio, which is spread among several securities so as to minimise the risk of loss.
Thus the small investor is also able to benefit from the expertise of the Managers of the UNIT TRUST. (The “portfolio” is the list of investments held by the TRUST).